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Global Payment Options Continue to Develop in Southeast Asia

By Megan Doyle

Several countries in Southeast Asia are developing global payment options to provide faster and cheaper cross-border payments in multiple currencies. More specifically, nations in the Association of Southeast Asian Nations (ASEAN) are collaborating to push for greater regional economic growth and financial stability with an emphasis on localized cross-border financial services.

ASEAN’s goal is to increase the interoperability of payment platforms to reduce fragmentation, streamline payments, lower costs, and drive innovation in the national payment landscape.1 Countries driving the initiative include Thailand, Singapore, Indonesia, Philippines, Malaysia. They expect the benefits of new, digital cross-border payment systems to reach from rural unbanked workers to small- and medium-sized businesses (SMEs) and beyond.


ASEAN Calls for New Global Payment Options


At a July 2019 ASEAN meeting, foreign ministers stressed the importance of strengthening regional cooperation and partnership to ensure sustainability in the face of a rapidly changing world.2 Improving cross-border retail payments was a key discussion topic.


Similarly, in early 2019 the heads of Bank of Thailand, Bank Indonesia, Bank Negara Malaysia, and the central bank of the Philippines met to discuss direct exchange of local currency in trade and investment. Trade between the four countries has consistently been conducted in USD, but the use of local currencies could help reduce transaction costs and foreign exchange risks.3 And in April 2019, the Monetary Authority of Singapore (MAS) and the National Bank of Cambodia signed a memorandum of understanding (MOU) to boost partnerships in fintech and financial services innovation.4


In line with the region’s desire for strong regional cooperation regarding cross-border payments is the ASEAN Economic Community Plan (AEC). By 2025, the AEC aims to:5


  • Create a unified payment infrastructure
  • Expand internet access and reach more underbanked customers
  • Harmonize government regulations and policies among digital ecosystems

Increasing International Payment Interoperability


Historically, the ASEAN payments landscape has been complex and fragmented, largely because the region comprises 10 nations of diverse languages, cultures, and economies.6 So, payment interoperability “presents a huge opportunity to enhance intra-regional trade and business activity across Southeast Asia, and Thailand in particular.”7 The benefits of new global payment initiatives that prioritize interoperability could include fast, affordable, and secure cross-border payments for businesses and individuals.


To make interoperable payment systems a reality, banks, card companies, and payment service providers are working together to develop modern cross-border payment systems that use technologies like QR codes, blockchain, application programming interfaces (APIs), and more.8 Thailand, for example, is developing cross-border QR payments to improve payments between Malaysia, Myanmar, Laos, and Cambodia, while one Indonesian company developed a QR system to allow Indonesians and Hongkongers to use their preferred local payment apps when abroad.9,10


Meanwhile, Siam Commercial Bank (SCB) is expanding cross-border payments through a blockchain-based system called SCB One Connect.11 Financial institutions can directly connect to SCB to make payments into and out of the ASEAN region, without exchanging currencies multiple times or adding additional correspondent banking fees.12


Need for Faster, More Affordable Global Payment Options Grows


A 2017 World Bank report found that about $62 billion in remittances were sent to ASEAN countries in 2015.13 But cross-border payment services are often slow and expensive—payments can take as long as five days, and fees are often 5 to 10 percent of the payment value, or more.14,15


To combat costly and slow payments, the AEC is working to develop inclusive, integrated cross-border payment networks—even for the large unbanked population in Southeast Asia.16 The process involves revamping the payments landscape to do away with systems that require the help of several additional correspondent banks, long processing times, and potentially hidden costs. Technological advances like blockchain can make real-time remittances with affordable prices a reality.17


For example, several major banks in Indonesia, Thailand, Malaysia, and Singapore have joined forces with SWIFT gpi to bring together real-time payments tracking, fee transparency, and same-day settlement.18 ASEAN financial institution CIMB has developed SpeedSend, a cross-border money transfer service that connects 10 ASEAN countries with 31 other countries worldwide, based on API technology and partnerships with financial institutions.19 SpeedSend charges less than $5 for an instant payment.20


Payment Interoperability Requires ‘Harmonized’ Regulation


But inclusive cross-border payment options likely won’t become a reality unless the regulations in all those countries can live together in harmony. According to KPMG’s Cross-Border Payments Interoperability Network Feasibility Study, harmonization of payment standards and infrastructure is key to drive economic integration across ASEAN.21 Meanwhile, according to EY’s State of FinTech in ASEAN report, most ASEAN countries have already started harmonizing their policies in recognition of fintech as a major growth opportunity.22


The ASEAN Financial Innovation Network (AFIN), for example, is working to develop a sandbox environment that allows banks, fintechs, and regulators to collaborate in real-time. The EY report says the sandbox approach will lead to “cross-border policy harmonization for better interoperability,” helping Southeast Asia fully benefit from digital technology.


However, EY notes that it may take some time to develop a truly harmonized system.


Following several meetings between foreign ministers and central banks of the ASEAN region, it seems Southeast Asian countries are developing a clear path toward new interoperable global payment options that are fast and affordable. A complete overhaul of the region’s payments landscape may take time, but the local—and cross-border—benefits may be large.

Megan Doyle - The Author

The Author

Megan Doyle

Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.


1. “Cross border payment systems in ASEAN gather steam,” ASEAN Today;
2. Joint Communiqué of the 52nd ASEAN Foreign Ministers’ Meeting Bangkok, 31 July 2019, ASEAN;
3. “These ASEAN Countries to Benefit from Cross-Border Settlement in Local Currencies,” CFO Innovation;
4. “Cambodia, Singapore in X-Border FinTech Pact,” PYMNTS;
5. State of FinTech in ASEAN, Ernst & Young;
6. Ibid.
7. “Payment interoperability: The next step towards a digital Asean,” The Nation|Thailand;
8. “Asean payment connectivity a major step towards cutting transaction costs,” The Phnom Penh Post;
9. Payment Systems Roadmap, Bank of Thailand;
10. “Cross border payment systems in ASEAN gather steam,” ASEAN Today;
11. “Easing the Pain of Growing Cross-Border Remittance Demand in Southeast Asia,” Ripple;
12. “Siam Commercial Bank Pioneers RippleNet’s ‘Multi-Hop’ Feature,” Ripple;
13. “Migrating to Opportunity: Overcoming Barriers to Labor Mobility in Southeast Asia,” WorldBank;
14. “Easing the Pain of Growing Cross-Border Remittance Demand in Southeast Asia,” Ripple;
15. “Cross border payment systems in ASEAN gather steam,” ASEAN Today;
16. State of FinTech in ASEAN, Ernst & Young;
17. “Easing the Pain of Growing Cross-Border Remittance Demand in Southeast Asia,” Ripple;
18. “Three major banks in Indonesia join SWIFT gpi,” SWIFT;
19. “Asean payment connectivity a major step towards cutting transaction costs,” The Phnom Penh Post;
20. “Easing the Pain of Growing Cross-Border Remittance Demand in Southeast Asia,” Ripple;
21. Cross-Border Payments Interoperability Network Feasibility Study, ASEAN Insights;
22. State of FinTech in ASEAN, Ernst & Young;

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